Case No. UWI-W-06-02, Final Order No. 30104

July 25, 2006

Contact: Gene Fadness (208) 334-0339




United Water rates to increase 11 percent


Customers of United Water Idaho will pay about $3 more per month for water on Aug. 1, according to a settlement approved Monday by the Idaho Public Utilities Commission. Annually, the increase for an average residential bill increases from $327.19 to $363.12.


Last February, United Water, which serves about 80,000 households in Boise and the surrounding area, asked for a 17.91 percent increase to raise an additional $5.9 million in annual revenue. After settlement negotiations, United Water and PUC staff settled on a 10.98 percent increase in rates and a $3.6 million annual revenue increase.


It is the first time United Water and commission staff resolved a major rate case through a settlement. “We appreciate that the parties were able to propose a resolution of the disputed issues in this case,” the commission said. “We also note that this case was filed less than a year after the final order in the company’s last rate case … which was highly contentious and appealed by the company to the Idaho Supreme Court.”


Part of the settlement in this case was that United Water would agree to dismiss its state Supreme Court case against the commission from the previous case. In that 2004 case, United Water appealed the commission’s decision to grant an 8.08 percent increase. The company, which initially requested a 21.46 percent increase, disagreed with the methodology used by commission staff to calculate the company’s revenue requirement. The commission’s methodology was used in the 2006 case and about three-fourths of the new revenue allowed in this case allows the company to recover investment held over from that 2004 case as well as a recalculation of pension expense. The remaining portion of the added revenue requirement is attributable to additional investment and operating costs since the 2004 case.


No one testified at a public hearing conducted by the commission on July 12. However, the commission received about 111 written comments. All those comments opposed any rate increase.


“It is understandable that no customer wants to see an increase in water rates,” the commission said. “Some rate increases are necessary, however, to ensure the company is financially sound and able to continue to provide clean, safe water to customers. Where United Water makes necessary, prudent investments to enable it to meet customer needs, existing regulatory law and principles require that we allow the company an opportunity to earn a fair rate of return on those investments,” the commission said.


The commission staff said the settlement eliminates the risk of an even higher revenue requirement and larger rate increase had the case evolved through a formal hearing process.


Interested parties may petition the commission for reconsideration by no later than Aug. 14. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.


A copy of the final order as well as documents related to this case are available on the commission’s Web site at Click on the water icon, then “Open Water Cases,” and scroll down to Case No. UWI-W-06-02.